U.S. Postal Service annuitants would be forced to enroll in Medicare alongside their standard health benefits program if a bipartisan bill introduced last week passes Congress.
The Postal Service Reform Act of 2018, introduced March 23, aims to reverse the net losses USPS has reported in its finances for the past 11 years. But the bill has received mixed reviews from advocates for federal employees who fear other government workers might one day be impacted.
National Active and Retired Federal Employees Association president Richard G. Thissen called the bill an attempt to “balance the books of the United States Postal service on the backs of postal retirees.”
A retiree may have to pay another $1,600 or more per year in Medicare premiums, according to Thissen.
Sens. Jerry Moran, R-Kan., Claire McCaskill, D-Mo., Tom Carper, D-Del., and Heidi Heitkamp, D-N.D., sponsored the bill.
“Nearly two and a half centuries after its founding, the Postal Service remains an important part of our everyday lives and plays a vital role in our economy,” Carper said in a statement. “But it continues to lose money at a record pace. Our economy still depends on a healthy and robust Postal Service. It’s our duty in Congress to pave a fiscally sustainable path that will enable this American institution to thrive.”
The USPS defaulted on its multi-billion-dollar retiree health prefunding payments for the fifth time in 2017 and missed the payments it owed to the federal retirement system for the first time. Along with the healthcare changes, the bill also eliminates the existing statutory payment schedule, cancels any outstanding payments and gradually pays off payments over 40 years.
“A Postal Service Medicare eligible annuitant subject to this section may not continue coverage under the Postal Service Health Benefits Program unless the Postal Service Medicare eligible annuitant enrolls in Medicare part A, Medicare part B and Medicare part D,” the bill said.
The bill’s Medicare requirement can be waived in cases of “extreme financial hardship,” though the bill does not specify what such cases would look like.
Should the bill pass, Postal Service employees and annuitants would be notified of the Medicare requirement and provided information on their options 180 days after passage.
The bill would also create a new Postal Service Health Benefits Program within the Federal Employee Health Benefits Program and administered by the Office of Personnel Management.
Some postal groups, such as the United Postmasters and Managers of America, have come out in support of the bill.
“UPMA applauds the efforts of Senators Carper, Moran, Heitkamp and McCaskill in introducing bipartisan legislation to further the goal of providing financial relief to the U.S Postal Service, helping safeguard a universal postal system, and encouraging innovation,” said UPMA co-presidents Tony Leonardi and Sean Acord. “UPMA looks forward to continue working with these Senators and other members of Congress to sustain the U.S. Postal Service, a proven national treasure.”
Though Thissen, of NARFE, said that the bill “sets a dangerous precedent for all federal retirees” the text claims that postal employees are different enough from other federal employees that its changes to health insurance requirements would not be applicable anywhere else:
“It is the sense of Congress that nothing in this section or the amendments made by this section is intended to establish a precedent with respect to federal employees at large, given that the Postal Service is a unique entity within the federal government and benefits for employees of the Postal Service are only partially integrated with benefits for federal employees at large.”
In addition to Postal Service healthcare changes, the bill also allows for a rate increase in postage prices, service and accountability reforms, the shipment of alcohol and a resolution to mismatching mailing addresses for some Missouri residents.
A similar version of this bill was introduced in the House in January 2017.
Jessie Bur covers federal IT and management.